Supplier indicates Apple will begin iPhone 5 production in September

Lending even more support to rumors of a later-than-usual launch for the fifth-generation iPhone, a new report cites a key component supplier as saying Apple doesn't plan to begin production of the iPhone 5 until September.

Avian Securities issued a note to investors on Monday in which it revealed the alleged plans for a September production start. The report said the latest information is "consistent" with other findings the organization has heard in recent months.

The information also supports a report from March, which claimed that Apple is not yet aligning part suppliers for the iPhone 5. That overseas report claimed that the fifth-generation iPhone wouldn't debut until Apple's 2012 fiscal year, which begins in late September.

In addition, Avian also claimed in its note that it has heard that Apple has a lower-priced iPhone with less expensive internal components in the company's roadmap. However, the handset is currently a "placeholder," and specific components and production timing remain unknown.

If Apple does in fact introduce a low-cost handset with limited features, Avian said it does not see the product being introduced until very late in 2011, or more likely in 2012.

Rumors have continued to swirl that Apple plans to introduce a contract-free iPhone, particularly to increase sales in prepaid handset markets like China. Apple Chief Operating Officer Tim Cook said in an interview earlier this year that his company is planning "clever things" to compete in prepaid markets.

In February, both Bloomberg and The Wall Street Journal reported that Apple is working on a smaller and cheaper iPhone that it could sell contract-free. But those reports were followed up by The New York Times, which claimed that Apple is in fact not working on a smaller iPhone. However, it did state that Apple has explored opportunities in developing a cheaper handset.

It can always be cost effective if they sell them for more than they cost to make but then the question is really how to get into the lower cost (far less able to pay) markets such as prepaid markets in overseas areas.

I can't see Apple making a smaller (read to be "cheaper") phone because at the sizes we're already at, it would probably cost as much or more to make than it does now. So, the probability that they might cut some features (cameras, audio out port etc) to get at a less expensive device might be what they are looking into. The only sure thing is that because Tim Cook expressly discussed getting into the prepaid arena, you can bank that Apple will do it.

Some how I just don't buy that Apple will put out a no contract iphone. It just does not make sense unless they plan on putting out a non contract iphone 3g. But why would they waste their time and money developing a subpar phone?

Does anyone else have thoughts on how this could be cost effective for Apple here in the US?

I doubt they'll sell it in the US. There are many markets where prepaid phones dominate. Not just developing countries but in some European countries prepaid phones are more popular than contracts. Apple needs to a lower cost phone to compete in those markets. In the US the prepaid market is much smaller so it's not a priority.

Jean-Louis Gassée has a good article from yesterday as to why an iPhone Nano doesn't make much sense.

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http://www.mondaynote.com/2011/04/10...e-iphone-nano/
I'd like to see a larger iPhone display but I also don't want a device with a footprint that is much larger. I do think that is a more natural way to go for forking the platform, but we'd also need a new SDK for the display's I/O even if they keep the resolution the same as the iPhone 4.

Some how I just don't buy that Apple will put out a no contract iphone. It just does not make sense unless they plan on putting out a non contract iphone 3g. But why would they waste their time and money developing a subpar phone?

Does anyone else have thoughts on how this could be cost effective for Apple here in the US?

If they include the integrated CDMA/GSM chips in the iP5 that let's them have one phone that will work on both Verizon and AT&T networks, I could very well see them doing that. There has been discussion in the past with Apple looking into allowing the user to essentially let the telcos compete for their business by allowing them to pick a plan directly from their phone.

I don't think Apple has a problem holding off on things for a bit to ensure they get it right. I'd rather wait a reasonable amount of time and have a rock solid product (e-wallet/NFC stuff, I'm looking at you) instead of having Apple shoot from the hip just to try to beat the competition (a la Honeycomb or Ballmer's 'slate') and end up with a huge security problem.

Apple has patience, which has often served them very well. If I'm putting money on an iOS device, do I want Apple to get it done right, or done by this summer?

If they include the integrated CDMA/GSM chips in the iP5 that let's them have one phone that will work on both Verizon and AT&T networks, I could very well see them doing that. There has been discussion in the past with Apple looking into allowing the user to essentially let the telcos compete for their business by allowing them to pick a plan directly from their phone.

I see this happening eventually.

They have the Gobi chip in the Verizon iPhone 4, sans the needed radios. But I cant see that happening unless they can make the chip considerably more efficient.

And with the A5 being slightly bigger than the A4, the additional chips for radios, adding back the SIM card slot, and then adding LTE on top of that, not to mention antennas, it seems hard to think Apple has the ability to make that leap in the next model. But maybe thats why theyd delay the release by several months.